Monopolies and Mergers: References to Commission (Hansard, 12 July 1983)

§ Lord Taylor of Gryfe
My Lords, I beg leave to ask the Question standing in my name on the Order Paper.

§ Lord Lyell
My Lords, the Secretary of State may refer to the Monopolies and Mergers Commission where it appears to him to involve more than £15 million of assets taken over or the creation or enhancement of a market share of a quarter or more. In deciding whether to make a reference, he takes account of the advice of the Director General of Fair Trading. The Government regard the present legislative arrangements as generally satisfactory but have not reached a definitive view on all its aspects.

§ Lord Taylor of Gryfe
My Lords. I thank the Minister for his Answer. In view of the fact that he said that the Minister takes account of the advice of the Office of Fair Trading, will he tell the House how often the Minister has departed from the recommendations of the Office of Fair Trading in the past five years? Secondly, would he agree that the financial press in 713 this country has expressed its alarm at the apparent inconsistencies in references to the Monopolies and Mergers Commission by Ministers? Would he agree that in order to build up appropriate case law and consistency in these decisions it might be desirable for the Minister to declare the reasons for his reference in each case?

§ Lord Lyell
My Lords, as regards the noble Lord's last supplementary question, I would not necessarily agree with him but would ask him to wait and see. As regards the noble Lord's second question, I would point out that all of us read the financial press and alas, there is a major gap in the financial press at present. Your Lordships would agree that the financial press is a forum for free comment. I cannot answer the noble Lord's first supplementary question, but I will attempt to discover some detail and write to him.

§ Lord Shinwell
My Lords, why does the noble Lord not admit that there is no such thing as a general rule in these matters? Judging by recent incidents in which some members of the previous Cabinet were involved, it is left to the discretion of Ministers.

§ Lord Lyell
My Lords, in general, yes, this matter is left to the discretion of Ministers; but at the same time competition is the main guiding principle by which those Ministers take their decisions.

§ Lord Harmar-Nicholls
My Lords, is my noble friend aware that there are very good practical reasons why the discretion should be left to the Minister? Is he not aware that one of the problems in parliamentary government is that we produce words which become firm and fixed upon which, in this case, the Office of Fair Trading has to operate hut which, by the very nature of things, cannot always take into account all the surrounding circumstances, whereas the Minister can do that; and that to that extent one is likely to get justice from the Minister's discretion rather than from the rigid parliamentary word as laid down in the Act itself?

§ Lord Lyell
My Lords, I am very grateful to my noble friend. Indeed, I take his point. But I would stress that the public interest test has to be viewed in the context of the discretionary system which we have and, of course, the strengths of the discretionary system should not be underestimated. As regards my noble friend's views on the legislation, if he can make a good deal of sense of Section 84 of the Fair Trading Act 1973 I should be very grateful for lessons from him after Question Time.

Lord Bruce of Donington
My Lords, the noble Lord was kind enough to indicate that the Government have not yet reached a definitive view on certain aspects of this matter. Would he be kind enough to tell the House of the likely time-span which will have to elapse before the Government arrive at a definitive view? Will he undertake to the House that as and when these mills of wisdom have ground to produce the ultimate result they will be communicated forthwith to the House?

§ Lord Lyell
My Lords, the answer to the noble Lord's first question is, "No". The answer to the noble Lord's second question is that both he and I know that these mills of wisdom grind exceedingly slow, in many cases thanks to the profession to which both he and I belong.

§ Viscount Eccles
My Lords, will my noble friend give us just one reason why an American bid for Sotheby's should be referred to the Monopolies Commission?

§ Lord Lyell
My Lords, I am very grateful to my noble friend for his interesting question, but he will not have long to wait. If he can wait until about November, then he and I and your Lordships will be able to read the report; but I believe that your Lordships would wish that until the report is published we should reserve comment, because all the details are still being considered.

§ Lord Taylor of Gryfe
My Lords, when the Minister ultimately declares his policy, will there be some attempt to establish some consistency in decisions? Foreign investors, in particular, who do not understand the idiosyncrasies of these references, find it extremely difficult to operate in London, where there is no body of consistent decision-making available to them.

§ Lord Lyell
My Lords, we will carefully note the comments and the interesting experience of the noble Lord, but I would again stress to him and to your Lordships that the main guiding principle in decisions of this nature is the aspect of competition.

§ Lord Diamond
My Lords, if the Minister is to continue to use a great deal of discretion, then the business community will not know where it stands. Is it not in the best interests of all the companies concerned that they should be able to judge on the basis of past experience what is likely to happen in their individual cases? Would the Minister consider following the precedent of the Inland Revenue, where, if there is a similar possibility of considerable delay in a decision on tax liablity affecting a proposal which might otherwise not be pursued, then as the Minister is very fully aware, under certain circumstances the Inland Revenue are prepared to give information in advance so that the proposal can either be followed or otherwise? Would the Minister consider whether that might not help the business community, which we are all committed to assist if we can?

§ Lord Lyell
My Lords, on the second question asked by the noble Lord, I am sure that he and, indeed, your Lordships will be aware that the example he quoted is, to a very large degree, different from the Question on the Order Paper concerning monopolies, mergers and competition. As regards the principles, about which the noble Lord was inquiring, perhaps he will find at least the guidelines concerning the legislation in the Fair Trading Act 1973, especially in Section 84.